Domenico Iacovelli: “Local agility is essential for survival”.
Domenico Iacovelli, CEO of the Schuler Group, on internationalization, growth and division of labor even in times of pandemic and war.
What changes for the old growth models of internationalization after Covid and the Ukraine war?
The world has changed because of the Corona pandemic, no question. The disruption and sporadic disruption of supply chains has focused more attention on local production that is as independent as possible. The Ukraine war will reinforce this trend. It is right to have this discussion now. But that is not why we should completely question internationalization and globalization. After all, there are good reasons why semiconductors have been manufactured primarily in Asia up to now. Of course, it would be good if we could set up such manufacturing in Europe as well. The only question is whether it would be competitive in the long term. The situation is different with the production of battery cells: Here we still have the chance to at least reduce the lead from the Far East with European factories.
How important is local agility of the national companies?
Local agility is essential for survival and was therefore a given at Schuler long before the pandemic. Of course, we have to give the national subsidiaries the necessary freedom to adapt to the conditions and needs of our customers in the respective market; after all, that is their very own task. At the same time, however, we must not allow the distance to the company and its overarching goals to become too great. Because direct, personal exchange was hardly possible in the past two years, many of our foreign employees inevitably had to act more independently and on their own responsibility. This has done both sides a great deal of good. But now it’s time to intensify contact again.
How does Schuler adapt its products to local needs while keeping its brand promises?
We have been pursuing a “local for local” strategy for several years now and produce the vast majority of components for our lines where our customers later use them. To achieve this, we use our global setup, which is unique in metalforming technology, with production and service facilities in China, Brazil, the USA, and Germany, which guarantee manufacturing to Schuler’s high standards, as well as our international network with hundreds of service experts around the world. Transporting a press line from Europe to China is not an option: shipping alone would cost around one million euros, not including customs duties of ten percent. However, development and design are still based at our headquarters in Göppingen.
Because direct, personal exchange was hardly possible in the past two years, many of our foreign employees inevitably had to act more independently and on their own responsibility. This has done both sides a great deal of good. But now it’s time to intensify contact again.
How does Schuler ensure the necessary qualification of its specialists worldwide?
Colleagues from abroad regularly visit Schuler in Germany, for example to observe and participate in the assembly of a new line at a customer’s site. In times of pandemic, we resorted to our own “Schuler Connect” solution: An employee put on a pair of data glasses with a camera, and the transmitted video signal could then be followed on a screen in Brazil or China – it’s almost like being there live. In addition, there are of course firmly established training courses; but it is just as important to gain experience on the living object, so to speak, even if it is only virtually over a distance of thousands of kilometers.
What role does Schuler play and how does it organize the worldwide transfer of knowledge – also to its customers?
During the pandemic, we launched a whole series of online seminars for our customers, primarily on the solutions for networking forming technology from our “Digital Suite”. For this purpose, we set up a small TV studio at our headquarters, which we also use extensively for internal communication measures. The feedback has been excellent, which is why we will continue to offer this service in the future. Our customers also have the opportunity to receive training on their equipment. Thanks to the corresponding digital twin, this is also possible even before commissioning: the virtual image can be operated in exactly the same way as the real press – with one important difference: you can’t break anything.
For years, China has been shining with enticing growth rates – what further development do you expect?
I am firmly convinced that China remains a growth market with rates far above those in Europe, for example. If you concentrate on the automotive industry, China is the only place where there is any growth at all. Added to this is the shift toward electromobility, which is taking place all over the world, albeit at different speeds. We have to give our customers an answer to this, and that’s what we’re doing with our products. An electric car also needs body and structural parts, but far fewer powertrain and transmission components. The big question is whether this loss can be compensated for by entering other areas such as the production of fuel or battery cells.
China’s policy is focusing on greater self-sufficiency – what does that mean for Schuler locally?
This confirms our strategy of giving our foreign subsidiaries more autonomy. Schuler China is now able to process its orders largely independently. From a national perspective, it is understandable, especially in these times, to make ourselves as independent as possible from external influences. In this way, China has only anticipated a development that has spread around the world in recent years and has been reinforced by the pandemic. But globalization cannot be completely reversed. A company can operate most efficiently if it uses the best resources where they are available. For Schuler, this means that the know-how and thus the company’s headquarters remain in Germany.
If you concentrate on the automotive industry, the only place where there is any growth at all is actually China.
What plans is Schuler pursuing for the development of the company in China?
With the acquisition of the Chinese press manufacturer Yadon in 2015, we set the right course for accessing the Chinese market. Demand for inexpensive lines remains high there. However, interest in high-tech machines such as those from Schuler is growing because the demand for the quality of products manufactured by forming technology is also increasing – the flawless and highly precise outer skin parts (keyword: gap dimensions) are just one example among many. With the “Strongline” we recently placed a hydraulic line for the production of lightweight components very successfully exclusively in China. This will certainly not be the last development for this market.